Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy
29 July 2016
Congratulations on your appointment to run BEIS. I welcome the creation of the new department (see http://climateanswers.info/2016/07/15-july-2016-new-british-government-a-step-forward-for-climate-strategy/). And it is great to have you back working on energy and climate change.
I also welcome your decision to review the Hinkley Point C proposal, following yesterday’s Final Investment Decision by EDF. The UK needs new nuclear power stations, for energy security and climate action reasons. Britain needs to send a clear message that we are ‘open for business’ post-referendum. And there is a strong need for greater policy and regulatory stability on energy and climate matters going forward. But none of these reasons require you to implement decisions inherited from the Cameron/Osborne government without proper consideration.
It is quite possible – indeed very sensible – to be pro-nuclear without supporting all forms of nuclear technology. The European Pressurised Reactor (EPR) is a complicated reactor design. Construction of EPRs in Finland and France is proving very problematic; construction in China seems to be going better, but is also taking longer than planned. You should consider whether the delays and difficulties are due to these being the first constructions of a new reactor design, or whether they are caused by the complexity of the EPR design. I recommend that you consult professor Wade Allison, Emeritus Professor of Physics at Keble College, Oxford. Wade strongly supports nuclear energy, but thinks that the complexity of the design means that an EPR will never be built on time or on budget.
You should also question whether it is consistent with national security to have Chinese state-owned companies involved in UK nuclear infrastructure. Given Nick Timothy’s comments on this (http://www.conservativehome.com/thecolumnists/2015/10/nick-timothy-the-government-is-selling-our-national-security-to-china.html), I am very confident that you will.
If you decide against signing the Hinkley contract with EDF, I recommend that you accompany the announcement with two other statements to emphasise that nuclear energy has a future in the UK. First, a statement that a decision against Hinkley does not represent any change in the Government’s approach to nuclear more widely. You should highlight and welcome the Office for Nuclear Regulation’s plan to deliver decisions on the Generic Design Assessments for Wylfa and Moorside in 2017. Second, confirmation that the £250 million over five years for nuclear innovation, promised by George Osborne in last year’s Autumn Statement, will be delivered, and that the £30 million Small Modular Reactor competition will continue.
Nuclear energy should be an important part of a decarbonised energy system. But it will not be all of it. Continued expansion of installed renewable capacity is essential. Energy efficiency measures to replace the Green Deal are urgently required. And the Government should re-engage with Carbon Capture and Storage (CCS).
George Osborne’s cancellation of the CCS competition was a serious error, undermining investor confidence and leaving the UK facing either higher costs or dependence on technology imports to reach the carbon budgets. The Committee on Climate Change has been clear about the importance of CCS. Restarting UK activity in this area would make financial sense, and also demonstrate that a decision against Hinkley did not represent any lessening of your commitment to decarbonisation.